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Guyana

Guyana

From the early interactions of Chinese indentured workers in the mid-nineteenth century to recent substantial Chinese investments in infrastructure and natural resource industries, the Sino-Guyanese relationship has undergone dynamic shifts. The first English-speaking Caribbean nation to recognise China diplomatically, Guyana today has evolved into its largest trading partner in the region.

Guyana

Written by Jared Ward.
Updated on 27 May 2024

Historical Background

The first contacts between China and Guyana occurred through indentured workers who came to the Caribbean during the mid-nineteenth century. The Chinese population that put down roots in Guyana largely embraced assimilation over their own culture, eventually establishing businesses and shops throughout Georgetown, the country’s capital. Significantly, Guyana’s first president, Arthur Chung (in office from 1970 to 1980), was the first ethnic Chinese head of state in a non-Asian country. The Arthur Chung Conference Center, a venue in Georgetown that often hosts Caribbean Community (CARICOM) conferences, was built with Chinese funding in 2006 and commemorates the link between the two cultures.

Forbes Burnham, Guyana’s first prime minister (in office from 1964 to 1980), came to power with American support and his early foreign policy was in line with that of the United States and its allies during the Cold War. When Guyana gained independence in 1966, the country joined the rest of the Anglophone Caribbean in offering Taiwan diplomatic recognition. However, this relationship was short-lived and, apart from a few agricultural exchanges, did not develop significantly. In 1972 the Guyanese Government switched recognition to the People’s Republic of China (PRC), becoming the first Anglophone Caribbean country to recognise the PRC diplomatically, going against the tide in a region that to this day remains a diplomatic stronghold for Taiwan.

During the Burnham era, Guyana struggled economically, plagued by a lack of affordable housing and an overreliance on importations of food and basic goods. In 1970 Burnham announced an ambitious self-sufficiency campaign to ‘Feed, Clothe, and House the Nation’. The PRC provided more than 70 million USD in interest-free loans between 1972 and 1976 and became an unlikely engine of Burnham’s development goals.

Notably, the Bel-Lu Clay & Brick Factory, completed in 1976, was the PRC’s first foreign aid project in the Western Hemisphere. However, China’s earliest legacy in Guyana was complicated. The brick factory shuttered not long after its completion due to mismanagement and a lack of infrastructure, falling well short of its ambitious goal to produce 10 million bricks annually. The relationship between the two countries reached a nadir after the death of Mao Zedong in 1976 when his successor, Deng Xiaoping, shifted China’s focus to economic development at home, choosing to ‘hide capabilities and bide time’.

China began to engage with Guyana more extensively under Hu Jintao’s leadership (2002–12) and his ‘Going Out’ policy. Early engagements in this period included investments in the mining and timber sectors; however, it was only recently that a surge in Chinese investment made Guyana central to the PRC’s Caribbean and Latin America policy. In 2015, a massive oil discovery off Guyana’s coast radically transformed the country’s economic outlook. The discovery—now estimated at more than 11 billion barrels—has positioned Guyana to become a leading global oil producer with a new windfall of funds to spend on infrastructure. In 2018, Guyana signed a Memorandum of Understanding (MoU) to join China’s Belt and Road Initiative (BRI) and Chinese companies have flooded the country, helping build up its infrastructure. By 2023, Guyana became China’s largest trading partner in the Caribbean, with bilateral trade rising 168 per cent from 2022 to 2023 alone.

China’s presence has sparked controversies that are echoed elsewhere in the developing world. Projects have been marred by delays, while indigenous workers and companies have been excluded from many of the economic benefits. Accusations of corruption have plagued the relationship, and Chinese companies have a mixed record on compliance with local labour and environmental laws. According to a recent VICE documentary, Chinese businessmen operating in the country secured lucrative contracts through bribes, with Guyanese Vice-President Bharrat Jagdeo at the centre of the controversy. Effectively managing its relationship with China is crucial for Guyana to achieve its development goals and avoid the debt curse that many other resource-rich developing nations face.

BRI Status

Guyana signed an MoU to join the BRI in 2018 and, in 2023, President Irfan Ali (in office since 2020) reaffirmed Guyana’s commitment to the initiative in a meeting with Chinese President Xi Jinping. They agreed to establish an Investment and Economic Working Group to explore new projects under the BRI framework. President Ali even linked Guyana’s quest to become carbon neutral by 2030 to the initiative. According to Guyana’s Ambassador to China, the BRI is ‘an important vehicle for the further advancement of global cooperation, connectivity, and people-to-people exchanges’.

Current Economic Relations

Guyana is among China’s oldest diplomatic partners in the Western Hemisphere and in recent years has become a focal point for Beijing’s engagement with the Caribbean. In 2023, Guyana emerged as China’s leading trade partner in the region and it continues to receive substantial Chinese investment in its natural resource industries. Beijing views Guyana as a key potential gateway between the American and Brazilian markets, and a space to show the potential of the BRI in the region. For Guyana, China represents a crucial partner to reduce overreliance on the United States. Despite Guyana having one of the world’s fastest-growing economies, the country still relies heavily on the expertise and capabilities of industrialised nations to develop its infrastructure.

Trade: Trade with China has experienced significant growth in recent years, although Guyana’s allies in the Western Hemisphere still dominate: Trinidad and Tobago and the United States make up 54 per cent of the country’s total trade, while China accounts for only 9 per cent. However, over the past decade, bilateral trade surged from 180 million USD in 2013 to 1.2 billion USD in 2023. In 2022, Guyana boasted a trade surplus of more than 100 million USD with China, importing 536 million USD of goods and exporting 688 million USD. Most of its imports are machinery for construction and other commodities, such as tyres and steel. Guyana’s primary exports to China are petroleum and timber, but these account for only about 2 per cent of the country’s total exports. While China is unlikely to become a significant competitor to Western markets for Guyanese exports, the Caribbean country’s urgent infrastructure needs and economic growth are likely to strengthen the relationship.

Investment and Finance: The bulk of Chinese investment in Guyana focuses on infrastructure. Funding is made available through Chinese banks, individual Chinese companies, or international lending institutions, like the Inter-American Development Bank (IADB). Once funding has been secured, a contract is put up for bidding, with Chinese companies usually emerging as the winner.

One of the most active companies in Guyana is the state-owned China Harbour Engineering Company (CHEC). Since 2011, CHEC has been engaged in various projects, including building roads, bridges, mines, and a 150-million-USD expansion of the Cheddi Jagan International Airport. In 2023, the company also contracted to undertake a 100-million-USD renovation of the Pegasus Hotel in Georgetown.

Other Chinese companies are also active in Guyana. For instance, in 2022, the state-owned China Railway Group secured a 192-million-USD contract, funded by the Export–Import Bank of China (China Eximbank), to expand the East Coast Demerara highway, building on a previous 48-million-USD road project completed in 2017. Additionally, in May 2023, the China Railway Construction Corporation was contracted to build a 260-million-USD bridge over the Demerara River, 172 million of which was financed by the Bank of China.

China’s influence extends into Guyana’s digital infrastructure. The China Eximbank lent Guyana’s government approximately 37 million USD to make faster broadband internet connections available throughout the country. The embattled Chinese tech giant Huawei has also been involved in creating ‘Safe Cities’ in Guyana, deploying its technology to surveil major urban centres in an effort to combat crime. In 2023, Huawei signed an MoU to build an AI research centre in Guyana that will ‘cater to the entire region’. Beijing is also investing in other sectors, such as health care. The Chinese company Sinopharm signed a contract in 2022 to build six new regional hospitals, and Chinese doctors routinely cooperate with their Guyanese counterparts on training and specialised procedures.

Another significant area for Chinese investment is in Guyana’s abundant natural resources. The Chinese state-owned oil conglomerate China National Offshore Oil Corporation (CNOOC) owns a 25 per cent working interest in Guyana’s offshore oil discoveries, while Exxon owns 45 per cent and operates the drilling and processing. Chinese companies are also active in the timber and bauxite industries. In 2007, the Chinese company BOSAI entered Guyana’s bauxite industry with a 60-million-USD bid for mining rights, later agreeing to inject another 115 million USD. A subsidiary of BOSAI, Guyana Manganese Incorporated, invested 75 million USD in the manganese industry, resuscitating a sector that had been dormant for five decades. In 2013, the Chinese company Baishanlin pledged a 100-million-USD investment in Guyana’s timber industry, including processing facilities and equipment, to help keep up with the Chinese demand for rare wood.

Key Controversies

Taiwan Office: In February 2021, the Taiwanese Foreign Ministry announced plans to open a representative office in Georgetown. Despite the Guyanese authorities’ insistence that the move was not an incremental step towards formal diplomacy, Beijing quickly condemned the move. Days after the announcement, a spokesperson from China’s Foreign Ministry stated: ‘We hope [the] relevant party will abide by the One China principle, refrain from any form of official exchanges and establishment of official institutions with Taiwan, take concrete actions to correct the error and eliminate the negative effects.’ Guyana reversed the decision in less than 24 hours, with Vice-President Jagdeo implying it had been made without executive knowledge and stating that no-one in the president’s office had authorised the move.

While this diplomatic snafu seemingly had no impact on Sino-Guyanese relations, it highlights how Guyana’s need for Chinese investment makes it susceptible to coercion. If Beijing’s past actions in the Caribbean are indicative, formalising relations with Taiwan—a leading technological powerhouse—can have real-world implications. For instance, Saint Lucia, a neighbouring CARICOM island nation, has oscillated between recognising China and Taiwan since initially establishing formal relations with Taiwan in 1984. In 2007, Saint Lucia swung back towards Taiwan, prompting China to halt construction projects midway through, including a 140-bed hospital.

Quality and Environmental Issues: Another recurring issue is China’s failure to meet expectations. Major Chinese projects in Guyana have faced setbacks or failed to materialise. For instance, CHEC had initially committed to a 130-million-USD renovation and extension of the Cheddi Jagan International Airport, Guyana’s primary international airport. The project was supposed to be finished by 2017 but faced delays and ultimately was completed only in 2022. In 2022, the China Railway Group Limited was contracted to construct the Amalia Falls hydropower station. The station had long been seen as a crucial source of clean energy, but in May 2022, China Railway withdrew from the deal, citing its inability to finance the 700-million-USD project and requesting the Guyanese Government cover the cost.

Furthermore, it remains unclear how much the relationship benefits ordinary Guyanese citizens. Chinese companies continue to face accusations that they flout local labour laws by failing to hire local workers, instead bringing in Chinese workers to complete projects. There have also been environmental concerns. For instance, Chinese logging company Baishanlin announced a 100-million-USD investment in timber-processing facilities, while promising to provide equipment and jobs and abide by environmental considerations. However, Baishanlin failed to deliver on these promises. The company has been accused of illegal felling operations and the government revoked its forestry concessions, going so far as to seize Baishanlin equipment.

Elsewhere in Guyana, Chinese companies have faced accusations of poor workmanship. For instance, in 2021, the Matthews Ridge Dam built by the Chinese company Guyana Manganese Inc. (GMI), a locally operated subsidiary of the Chinese Bosai Minerals Group, collapsed, flooding local communities. The Guyanese authorities have attributed the collapse to poor construction materials and practices, and President Ali’s calls for repairs had been reportedly disregarded as of 2023.

Guyana–Venezuela Border Dispute: The dispute over the Essequibo region between Guyana and Venezuela has a long history, dating back to an 1899 agreement that awarded the land to what was then British Guyana. However, the discovery of significant oil deposits in the area has reignited Venezuela’s interest in the territory. In December 2023, Nicolás Maduro, Venezuela’s embattled president, held a referendum on whether to claim sovereignty over the region, which constitutes nearly two-thirds of Guyana’s current territory.

The affirmative referendum result enabled Maduro to establish a more aggressive military presence on the border between the two countries. While the international community has largely supported Guyana’s position, escalating tensions threaten regional stability. Aiming to maintain its friendly relations with both countries, Beijing has positioned itself as a mediator, advocating for a peaceful solution. China’s interest in regional stability is underscored by its significant economic ties with both Guyana and Venezuela. Chinese banks have provided substantial loans to Venezuela—often repaid in oil—totalling as much as 20 billion USD. As tensions escalate, China’s policy of non-interference could face challenges, particularly if the dispute escalates into a military confrontation.

The United States, which has historically been at odds with Venezuela, has supported Guyana but has refrained from offering military assistance. However, US involvement or further instability in the region could complicate China’s economic and strategic interests in the area. Brazil, China’s most significant economic partner in South America, has also signalled potential involvement in the conflict, especially if the hostilities threaten to spill over its borders with Venezuela and Guyana.

Global Competition: Tensions between the United States and China continue to shape and complicate China’s relationship with Guyana. US politicians have cautioned Guyana, along with other Caribbean nations, about the potential drawbacks of closer ties with China, with common refrains about Beijing’s disdain for democracy and transparency, as well as warnings against the risk of falling into a ‘debt trap’. The US Government has also made efforts to diminish China’s influence in international lending agencies like the IADB, which China joined in 2009.

Despite China’s growing capabilities, the United States remains Guyana’s largest trading partner and ally, benefiting from geographical proximity and deep cultural and historical ties. A significant portion of Guyana’s population resides in the United States and contributes to their homeland through remittances, businesses, and political influence. The United States sees itself in direct competition with China in Guyana and throughout the Caribbean. In late 2023, Sarah-Ann Lynch, former US Ambassador to Guyana, disclosed that the US Government has helped facilitate contacts with American companies to out-compete the Chinese.

In-Depth Sources

Brotherson, Festus, jr. 1989. ‘The Foreign Policy of Guyana, 1970–1985: Forbes Burnham’s Search for Legitimacy.’ Journal of Interamerican Studies and World Affairs 31(30): 9–35.

Taylor, Moe. 2015. ‘One Hand Can’t Clap: Guyana and North Korea, 1974–1985.’ Journal of Cold War Studies 17(1): 41–63.

Ward, Jared. 2021. ‘From Bullets to Bricks: Chinese Foreign Aid to Guyana During the Mao-Era, 1972–1976.’ Journal of World History 32(3): 491–515.

Updated on 27 May 2024


Jared Ward is a lecturer based in Akron, Ohio. He received his PhD from the University of Akron in 2019 with a focus on Chinese foreign policy towards the developing world. He researches China’s economic and political engagement in the English-speaking Caribbean during the Cold War and in modern times.